BRL Hardy: Globalizing an Australian Wine Company

Submitted by Group 8 Shashank Shekhar Karanpal Singh Julka Raghu Vuduta Gaurav Nigam K Veeranjaneyulu Sudipti Katwal

PGP/16/045 PGP/16/085 PGP/16/119 PGP/16/143 PGP/16/144 PGP/16/351

1. Identify the specific sources of tension between Mr. Davies and Mr. Carson. How has Mr. Millar been able to handle these differences? How would you rate his performance? What feedback would you give him? Ans. BRL and Hardy were two companies competing in the same industry with different strategies and cultural as well as management styles. Hardy was known for its polite and traditional values with award-winning quality wines while BRLs culture was more aggressive and commercial specializing in fortified, bulk and value wines. Post-merger the tensions between Mr. Davies and Mr. Carson can be attributed to these differences as well as the fact that majority of the top-level management consisted of members from BRL. Moreover, Mr. Carson had to report to ex-BRL top management creating an uncomfortable, uncertain and challenging situation for him. Both Mr. Davis and Mr. Carlson doubted each others capabilities owing to the difference in their style of working and opinions on market strategies. Despite his good performance and track record in Hardy, Mr. Carson had to earn his stripes to gain recognition and credibility while on the other hand Carsons management believed that Davies and Co. didnt understand international marketing. The ex -Hardy people felt like outsiders and all these things contributed to enhancing the tensions between the two. Mr. Millar soon realized that the merger had led to tensions between the two people concerned and was quick enough to handle the differences. There was a gap in communication and lack of the much needed team spirit. Thus, deciding to have Mr. Carson report directly to him on the UK Companys profit performance but through Mr. Davies for marketing and brand strategy was a strategic move intended to ensure that their tensions didnt harm the operations and the expertise and potential of the two managers together could benefit the company. Besides his efforts and hope that the differences would subside by negotiation, he wasnt able to integrate the new BRL Hardy team, that is, ex -BRL and exHardy management teams which was crucial pertaining to the tensions and situation in the company. To rate Mr. Millars performance, he as a leader had much control over the situation and could have done a better job in his effort to integrate the two newly merged companies into one BRL Hardy management team. The fact that ex-Hardy members felt like outsiders for over a year and had to earn their stripes besides having good track records as Hardy employees, shows his inefficiency in integrating the two companies into one core BRL Hardy team. Besides his efforts to resolve tensions between Mr. Davies and Mr. Carson through the means of constructive confrontations, he took a few wrong decisions that led to deterioration of the situation. Two lines of reporting relations were ambiguous and could have created uncomfortable situation for Mr. Davies. Also, the framework and structure for working wasnt set for them. Even as he had the objective clear to create a more decentralized

approach, he did not take any significant steps to ensure the same. And aware of the postmerger tensions, change management at the global team wasnt taken care of properly. Hence, he should be rated average in his performance. Mr. Millar should focus on improving the organizational design and making the roles and responsibilities clear for Mr. Davies and Mr. Carson. The issue of lack of team spirit and coordination among the managers should be addressed soon as it could turn out to be harmful during tough financial conditions and steps should be taken to resolve their differences and integrate the management team as one. Also, Mr. Carsons entrepreneurial activities should be leveraged at a global/corporate level. Question 2: Should Mr. Millar approve Carsons proposal to launch Distinto? Defend your response with strong evidence and arguments? Answer: Carson wants to launch Distinto by giving it a unique brand image which was built around the Mediterranean lifestyle, a culmination of passionate, warm, romantic and relaxed style with a strong linkage to food. However, there were a lot of points which supported the launch and some were against. Advantages of launching Distinto 1. It will offset the shortage of Australian red win in the market whose demand is projected to grow 2. Red wine is considered important from the distribution point of view in the market. D'istinto can be used to fully leverage the potential of this strong distribution channel 3. D'istinto was proposed to be designed as a food lover's wine. This can help it in making a strong consumer brand. 4. D'istinto brand can cater to the needs of average wine consumers both in terms of price and knowledge of wine Disadvantages of launching D'istinto 1. There was a concern about the overloading of human resources who were already stretched by the expansion of the previous 5 years and the launch of Dinstinto might overload them again 2. The launch of D'istinot can lead to cannibalization of existing brands such as Stamps and Nottage Hill which is an area of huge debate in the firm 3. There was already a failure experienced by the firm with the launch of Mapocho. So the company was skeptical towards the success of D'istinto 4. Millar was also concerned about the loss of focus of Carson. Carson was already overloaded with other wine brands

There are both positives and negatives of launching D'istinto. However, the need for extra sales force for the launch of new wine brand is clearly a strong no for the launch. The case already mentions that sales force makes an important point for the pull strategy in case of launch. Hence D'intinto should not be launched.

3. What recommendations would you make to the organization concerning the conflicting proposals for Kelleys Revenge and Banrock Station? Clearly identify a possible HQ decision and supporting evidence as well as a Subsidiary perspective before making your choice. From the perspective of the Subsidiary: (Kellys Revenge) For The brand Kelleys Revenge was targeted to the low price range compared to other firms in the industry like Stamps and Nottage hills. Because the price was below 4.49, and represented more than 80% of the market, the product got good support; since other firms like Stamps and Nottage hills were priced a bit higher. It also got the support of the UK sales management. They were able to pursue the concept and a colorful label was designed. This seemed attractive to the supermarket shelves in Europe. Against There is a concern about the name itself. Even though its named for an important character in the history of Australian wine industry, it also represented an infamous Australian bushranger. From the perspective of HQ: (Banrock Station) For The product was an immediate success in Australia and thereafter became the largest selling imported brand in New Zealand. The brands image was reflected in its earth-tone labels and its positioning as an unpretentious, down-to-earth wine was captured by the motto Good Earth, Fine Wine. So HQ backed this as International product. Against The label was too dull and colorless to standout on supermarket shelves and the products environmental positioning would have limited appeal to UK consumers half a world away. There is a limited appeal to the UK consumers about its environmental positioning. So, As the HQ is backing the product Banrock Station as an international brand, launching it would be in line with the long term strategy of BRL Hardy. It also created good success in some of the markets.